Markle v. Fallin

Hart, J., (after stating the facts). It appears from the record that only one of the notes given for the purchase price of the land in question was due at the time the original complaint was filed by the plaintiff on the 10th day of October, 1921, and that the final decree was entered of record on the 22nd day of November, 1922. The deed from the plaintiff to the defendant contained a clause providing that it was agreed that, in default of the payment of either principal or interest of the notes when due, all of the notes should become due and payable at the option of the holder. The notes sued on contain no such clause. Hence it is contended that the action was prematurely brought. While there is a division of the authorities on this question, it has been set at rest in this State by the decision in Fairbairn v. Pofahl, 144 Ark. 313. It was there held that where a vendor sold land under a contract stipulating that, upon default in payment of two of a series of notes, the entire sum might be declared due, such provision is not invalid as being in the nature of a penalty or forfeiture. So, whatever may. be the rule elsewhere, it may be taken as settled in this State that, though there be no accelerating clause in the notes, an accelerating clause in the contract, whether it be contained in a mortgage or a deed retaining a vendor’s lien, will enable the holder, upon the breach mentioned in such clause, to foreclose for the full amount of the notes. It is next insisted that the plaintiff was not the holder of the first three notes, because he had deposited them with the Arkansas National Bank as collateral security for a loan obtained from. it. Now it will be remembered that B>. E. Fallin was made a party to the action at the request of the defendant, and that he entered his appearance in writing. The Arkansas National Bank was permitted to file its intervention in the action. It asked that the rights of the bank be declared superior to all the parties in the suit, and prayed for a foreclosure of the vendor’s lien to secure the payment of the note executed to it by the plaintiff. The defendant, on the 21st day of November,-1922, filed an answer to this intervention, in which ■ she' denied the superiority of the lien of the bank, and ásked -that the intervener take nothing as against her. The. defendant also prayed for all other general and equitable- relief to which she might be entitled. This court has uniformly held that the object of the Code system of pleading is to force a trial -on the merits. Where the pleadings furnish the opposite party with notice of the facts upon which the pleader relies, and the parties, by consent, go to trial upon the issues thus raised, they will be determined by the court and -the rights of the parties settled according to the issues raised by the pleadings and the proof. In the case at -bar all the parties interested in the transaction in question were before the court aiid asked that their respective rights be determined. Their pleadings stated the facts upon which their respective contentions were based, and, by agreement of the parties, the case was heard upon oral proof. The proof was directed to the issues raised by the pleadings. These issues were decided adversely to the contention of the defendant. The plaintiff and the bank are not contesting with each other as to who is the holder of the notes. Both of them are asking that the vendor’s lien be foreclosed. The defendant would have been fully protected by a payment of the notes under the terms-of the decree, and is not prejudiced in anv manner by the form of the suit. Both the plaintiff and the bank elected to declare all the notes due and to ask for a foreclosure of the vendor’s lien. Therefore, raider the decision of onr own court as indicated above, with regard to the accelerating clause in the deed, the chancellor was right in entering a decree ’ of foreclosure for the amount of the unpaid purchase money notes. Another contention made by the defendant is that the notes on their face recite that they bear 10 per cent, interest from date, and that the deed recites that they only bear 8 per cent. The recitation in the deed will be treated as a mistake, for the face of the notes themselves must govern as to the rate- of interest.' The -notes are •the principal thing, and contain the obligation of the defendant. The recitation,of the notes in the deed gives the vendor a lien on the land for the unpaid purchase money. There can be no doubt that the notes sued on are the ones referred to in the deed, and, for- that reason, the recitation in the notes as to the rate of interest must control. This brings us to a consideration of the merits of the controversy between the plaintiff and the defendant. This is a question of fact, and the plaintiff and the defendant are the chief witnesses in the case. Each flatly contradicts the testimony of the other. The testimony of the defendant is corroborated, to some extent, by two witnesses who testified that the plaintiff was interested with his son, B. E. Fallin, in oil leases in Texas. The plaintiff, however, explained that his interest was only to lend his son money, and that he expected his loan to be protected by the success his son had in his oil ventures. In this respect he is corroborated by two of his other sons, who were in Texas during the time of the transaction involved in this suit, and who stated positively that their father was not interested in the oil ventures except as a lender of money, just as the defendant was interested. In one instance he became one of the trustees to sell a tract of leases comprising 160 acres, by dividing it into tracts of 5 acres each and conveving them to prospective purchasers. The plaintiff claimed that he did this to secure a loan that he had made to his son, and there is no direct evidence in the record tending to contradict his testimony in this respect. According to his testimony, he and the defendant each lent his son, R. E. Fallin, money, and each realized that getting the money back depended upon the success of his oil ventures. He denied in positive terms that the sale of the property in question was pursuant to any understanding or agreement that any money that the defendant had loaned R. E. Fallin was to be credited on the purchase price of the land. It appears from the record thaf R.. E. Fallin and the defendant contemplated marriage, and it may be that the confidence inspired-by this relation caused the defendant to purchase the property in question for a home for herself and her future husband. In any event, the testimony of the plaintiff and the defendant is in irreconcilable conflict. The deed and notes made a prima facie case in favor of the plaintiff, and the burden was on the defendant to establish her defense to the suit. The chancellor held against her on the issue of fact raised by her answer and cross-complaint, and it cannot be said that his finding is against the preponderance of the evidence. Therefore, under the settled rules of practice in this court, the findings of the chancellor will not be disturbed on appeal, and the decree will be affirmed.